Operations Research in Engineering and Technology Management
Semiconductor industrial equipment industry -- Operations research, Semiconductors -- Design and construction, Linear programming, Contractors -- Selection and appointment, Decision making
The following paper examines a complex decision making method for the selection among six contractors (X1 through X6) for four scopes of work on a large semiconductor construction project. A model is developed based on two concepts: a multiple objective linear programming and a hierarchical decision model. This combination setup is a straightforward model of various users influenced criteria and alternatives, which once inputted into a computer spreadsheet model, reveal the “optimum” choice for the contract winner. As a result, the typical lowest-cost bidder is not chosen for the award. Rather, the model shows an outcome based on the user’s preference for the chosen criteria.
This paper includes the calculation for the multi-objective linear program. It describes why the lowest bidder on a project is not necessarily the best choice, and covers the factors that influence the final decision. Though not applicable to all projects, it lays the groundwork for similar project selection scenarios and would be a useful tool in their development.
Ferrigno, Michael and Freeland, Matthew, "D1D Contractor Selection Model: A Combined HDM/MOLP Approach" (2001). Engineering and Technology Management Student Projects. 2213.